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Malampaya Fund (Part 2): Does it exist only on paper?

Metro Manila (CNN Philippines) – The Malampaya facility is 80 kilometers northwest of the island of Palawan. The province is claiming a share from the natural gas project proceeds.

Now, if the Supreme Court favors the province in a pending case, Palawan can get around P80 billion from the Malampaya Fund.

A civil sociey group has long been fighting for Palawan’s right over the fund.

“This has been defined in the Local Government Code as being equivalent to 40% of gross proceeds of the national government,” lawyer Harry Roque, counsel of the Kilusang Love Malampaya, says.

But Roque doubts whether government could pay up.

“If we win this case, I have no idea where government will get the P80 billion that is due Palawan,” he says.

Under a set of laws, the Malampaya Fund — which represent thte earnings of the government from the operator of the natural gas project — is considered a general fund that can be used for other purposes as well.

These laws were issued during the Marcos regime.

Sharon Almanza, deputy treasurer, says: “It’s part of the one-fund concept. For instance, last year, they remitted about P22.28 billion for the entire 2014. It’s being used by the government in the budget. So it’s part of the sources of financing or the revenue that we generate, we use it for the spending of the government. The cash has been used already by the government.”

Almanza says, however, that the fund still exists on paper.

“It’s an accounting balance,” she says. “So based on the special account in the general fund for Malampaya, the balance is about P167.8 billion.”

If I do need the funds, I was assured by the DBM [Department of Budget and Management] that they will make it available,” Energy Secretary Jericho Petilla says. “Where it will come from, di ko na alam.”

Almanza says: “But definitely for the requirements of DOE [Department of Energy], if they submit a budget to DBM, then DBM has to include that in the budget and then we would have to fund it.”

But what if the Supreme Court orders the executive branch to give Palawan’s share?

“Yung Palawan, it’s a risk to our budget, because even though we say that we have a balance of P166 [billion], as I said, it’s an accounting balance. So meaning to say it will have an impact on the fiscal space of the government when that happens.”

For his part, Harry Roque, legal counsel of Kilusang Love Malampaya, says: “The problem for the national government is: Even if they want to reimburse monies that they have already spent from the special fund, where will they get it from?”

Almanza has answer to this, saying: “So where do you source the 80 billion? Then you have to bump off other expenditures just to comply. Kasi pwede rin na you negotiate with Palawan and then you can… well, depending din sa Supreme Court ruling, di ba, on how we’ll be settling.”

For now, the province is not benefiting from the windfall from the natural gas project.